Page 2 - Brosur ICT 2017

Why Indonesia?

• AECOM’s Asia Construction Outlook 2014 report rates
Indonesia as the top country in terms of potential
construction spending growth in the medium term and
the positive trend is bound to continue amid the rising
demand for housing and plans for public infrastructure.
• High levels of capital investment, the construction
industry handily outpaced Indonesia’s overall economic
growth over the past decade, and become an increasingly
significant contributor to the country’s GDP (accounts
for roughly 10% of today’s GDP), were growing from IDR
125.3 trillion in 2003 to IDR 907.3 trillion in 2013.

Indonesia Construction Sector Snapshot • Housing needs, rail and road networks, ports and airports,
power generation and distribution all point to growing
Contribution to GDP 9.96% (Q3 2015) demand as the country’s economy matures and as the
population grows in number and affluence. The industry’s
Number of Contractors 129,819 (2014)
growth also spells attractive opportunities for suppliers of
Number Employed 7.72 million (Feb. 2015) building materials and companies selling or leasing
in the Sector equipment.
Standardised ASEAN Chartered Profesional Engineer (ACPE) certificate • Indonesia’s rising personal income is driving demand for
Qualification and the National Construction Services Development Board residential and commercial property that puts the country
(LPJKN) certification
squarely on the radar of the global construction industry.
Relevant Law • Presidential Regulation No. 39 of 2014 on the Negative
Invesment List reserve low-technology and low-risk • Builders in Indonesia benefit from a large and relatively
construction services for local SMEs and coorporation low-cost workforce as well as growing domestic output
• Foreign companies can establish representative offices in of cement and other materials.
Indonesia and execute complex and high-technology • The rising investment and government spending make
projects in partnership with local companies, Minister Indonesia one of the most important construction markets
of Public Works Regulation No. 10/PRT/M2014 provides the in the world. Construction spending growth in Indonesia
guidlines will remain among the strongest in the region.

Global construction companies have a strong foothold
in Indonesia, particularly in complex infrastructure
projects. Local businesses have seen the need to
cooperate with foreign companies. As this is the most
straightforward way for local private companies to get in
on large-scale projects and transferring the know-how
benefit simultaneously, which in turn will help them
catch up and adapt to international standards.

The National Development Agency (BAPPENAS)
estimated the infrastructure investment need for the
period of 2015 through 2019 at IDR 7,200 trillion at
the national level alone, only a quarter of which is to
be funded out of the state budget. While state-owned
enterprises will chip-in, the lion’s share is expected to
come from the private sector. This creates more favorable
regulatory environment for PPP projects, including a
more clearly defined process of land procurement that
sets deadlines for various step involved. This should
make private companies more enthusiastic about
engaging in infrastructure development.